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Chicago grains, soybeans rally on short covering, U.S weekly exports

Xinhua, January 20, 2016 Adjust font size:

Chicago Board of Trade (CBOT) corn, wheat and soybean futures Tuesday closed all higher with corn prices leading the gains on technical buying as traders cut their bearish bets.

The most active corn contract for March delivery rallied 4.5 cents, or 1.24 percent, to close at 3.6775 U.S. dollars per bushel. wheat for March delivery added 0.75 cents, or 0.16 percent, to close at 4.745 dollars per bushel. Meanwhile, March soybean delivery rose 4.5 cents, or 0.51 percent, to close at 8.835 dollars per bushel.

Short covering was the feature of the day as investors holding a record net short grain position, are looking to reduce their market exposure.

"The CBOT grain markets are running through layers of fund short covering which has sparked a rally, " AgResource company, a Chicago-based agricultural research institute, said in a note. " Fund managers are being ultrasensitive to losing futures positions as their equity portfolios have performed so poorly in 2016. "

The U.S. weekly export inspections released by the U.S. Department of Agriculture(USDA) on Tuesday showed that corn shipments through the week ending Jan. 14, were up about 5.7 percent from the previous week, wheat exports logged a nearly-14-percent drop, soybean inspections rose by more than 12 percent from the prior week, respectively. Analysts said the export of U.S. soybeans last week was slightly larger than expected.

For their respective crop years to date, the U.S. corn shipments were down about 20.6 percent from a year ago, but the drop is 4 percentage points lower compared to six weeks ago.

As for wheat, export inspections fell by more than 10 percent from the previous year, the drop, however, is almost 5 percentage points higher compared to six weeks earlier.

For soybeans, exports were down over 11 percent from last year, according to the USDA.

Wheat gains Tuesday were capped by the news that Egypt, the world's largest wheat importer, is slow to book early February wheat milling needs as traders talk about a dollar shortage in Egypt. Enditem